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A gift force

Last month the political think-tank Respublica called for a reform of the way Gift Aid operates in the UK. With the new coalition government still young, it can be difficult to discern which of the policy institutes has lost or increased its influence, but Respublica has several Conservative MPs on its advisory board. Its director, Philip Blond, is said to have played a key role in conducting the 'mood music' of David Cameron's campaign, resulting ultimately in the conception of the Big Society. So when the group makes such recommendations, it is likely to get significant attention.

Respublica's report 'wholeheartedly supports the principle of Gift Aid', but concludes that the current system is outdated, resulting in around £750m going unclaimed each year. It suggests a series of changes that would allow charities to, for example, reclaim Gift Aid on money that is donated by mobile phone text message, or do more of their administration online (making it quicker and therefore cheaper). These amendments could also make governmental management of the scheme more cost effective.

Improving Gift Aid collection is a natural fit with the government's new agenda. The Big Society relies on enhancing support for civil society rather than the state, and the encouragement of those who donate time and money to good causes. At the moment, almost 20 per cent of charities are unable to find funding for additional services, and 16 per cent are struggling to cope with the effects of recession. Before turning to politics Philip Blond was an Anglican lecturer in theology, and with most churches operating as charities such a move would undoubtedly be good for their balance sheet. Applause all round then?

Perhaps. But we would first sound a note of caution. When paying Gift Aid a donor diverts taxes from government coffers to charitable organizations. Those who look at state expenditure and see much waste - or object to, say, funding arms and the military - are doubtless pleased to do so. But those who look at that expenditure and see that it is used to provide many unfashionable social services - including those under threat from cuts - may be more wary. Are we convinced that we should be taking funds used to run day care centres and libraries and divert them to restore bell towers, or groom botanical gardens?

Equally, do we prefer to play Lady Bountiful with condescending charity, or organise ourselves so that it is not personally necessary? Take, for example, meals-on-wheels services. Once provided solely by volunteers, we now arrange for their delivery from local councils, as part of our collective desire to build a more just society.

An increase in funds directed to our churches and associated charities may have many welcome outcomes. But we should at least be prepared to consider what it is that we may be about to lose.